John Aldrin T.

Ramos

March 13, 2015

BSBE 3-3/Group 3

Prof. Jocson

Labor Economics-Written Report

Book Six
Post Employment
Title I
Termination of Employment

Art 279. Coverage- The provisions of this Title shall apply to all establishments or

undertakings, whether for profit or not

Art. 280. Security of Tenure- In cases of regular employment, the employer shall
not terminate the services of an employee except for a just cause or when
authorized by this Title. An employee who is unjustly dismissed from work shall
be entitled to reinstatement without loss of senior rights and to his backwages
computed from the time his compensation was withheld from him up to the time

of his reinstatement.
Art 281. Regular and casual employment- The provisions of written agreements
to the oral agreements of the parties, an employment shall be deemed to be
regular where the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer,
except where the employment has been fixed for a specific project or undertaking
the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or service to be performed is

seasonal in nature and the employment is for the duration of the season.
Art 282. Probationary Employment- Probationary employment shall not exceed
six months from the date the employee started working, unless it is covered by
an apprenticeship agreement stipulating a longer period. The services of an
employee who has been engaged on a probationary basis may be terminated for
a just cause or when he fails to qualify as a regular employee at the time of his

engagement. An employee is allowed to work after a probationary period shall be

considered a regular employee.

Art 283. Termination by employer- An employer may terminate an employment
without definite period for any of the following just causes.
a. The closing or cessation of operation of the establishment or enterprise, or
where the employer has to reduce his workforce by morethan one half due to
serious business reverses, unless the closing is for the purpose of
circumvevnting the provisions of this Chapter.
b. Serious misconduct or wilful disobedience by the employee of the orders of
his employer or representative in connection with his work.
c. Gross and habitual neglect by the employee of his duties
d. Fraud or wilful breach by the employee of the trust reposed in him by his
employer or representative.
e. Committing crime or offense by the employee against the person of his
employer or any immediate member of his family or representative

Art 284. Reduction of personnel- The termination of employment of any

employee due to the installation of labor saving devices, redundancy,
retrenchment to prevent losses and other similar causes, shall entitle the
employee affected thereby to separation pay. In case of termination due to the
installation of labor saving devices or redundancy, the separation pay shall be
equivalent to one month pay or to at least one month pay for every year of
service, whichever is higher. In case of retrenchment to prevent losses and other
similar causes, the separation pay shall be equivalent to one month pay or at
least one half month pay for every year of service, whichever is higher. A fraction

of a least six months shall be considered one whole year.

Art 285. Disease as ground for termination- An employer may terminate the
services of an employee who has been found to be suffering from any disease
and whose continued employment is prohibited by law or is prejudicial to his
health as well as to the health of his co-employees: provided, that he is paid
separation pay equivalent to at least one month salary or to one half month

salary for every year of service, whichever is greater, a fraction of at least six

months being considered one whole year

Art 286. Termination by employeea. An employee may terminate without just cause the employee-employer
relationship by serving a written notice to the employer at least one month in
advance. The employer upon whom such notice was served may hold the
employee liable for damages.
b. An employee may put an end to the relationship without serving any notice to
the employer for any of the following just causes:
1. Serious insult by the employer or his representative on the honor and
person of the employee
2. Inhuman and unbearable treatment accorded the employee by the
employer of his representative
3. Commission of a crime or offense by the employer or his representative
against the person of the employee or any of the immediate members of

the family and

4. Other causes analogous to any of the foregoing.
Art 287. When an employment not deemed terminated- The bonafide suspension
of the operation of a business or undertaking for a period not exceeding six
months, or the fulfilment by the employee of a military or civic duty shall not
terminate employment. In all such cases the employer shall reinstate the
employee to his former position without loss of seniority rights if he indicates his
desire to resume his work not later than one month from the resumption of
operations of his employer or from his relief from the military or civic duty.

Computation of Premium and Overtime Pay

The following example will show you how premiums and overtime rates are
computed (basic pay)

Example 1.

Regular Day. Cristina is an employee earning 300php per day. If she works
overtime for three hours during a regular day, how much is her take home pay for
that day?
Solution:
a. Hourly Rate = 300/8 = 37.50php
b. Overtime Rate = 37.50 x .25 = 9.375 (25% of 37.50) plus 37.50 (regular pay per
hour) = 46.875 (overtime rate) x 3 (working hours) equals 140.625php (overtime
pay)
c. Take home Pay = 300 php + 140.625 = 440.625 php (total pay for the day)

Example 2.
Special holiday. How much would a worker earning 400.00php receive if he is
required to work during a special holiday for 8 hours?

Solution:
400php (daily rate) x .30 equals

120php (30% of 400) plus 400.00 (regular

wage) = 520php (take home pay)

Example 3
Regular Holiday. Teresita works in a corporation and earns 500php per day. If
she works for 10 hours during a regular holiday, how much is her take home pay?
Solution:
a. Rate for the regular holiday = 1000 (500 + 100%)
b. Hourly rate for the regular holiday = 125 (1000/ 8)
c. Overtime rate = 125x .30 (based on Labor Code) = 37.50 (30% of 125 plus 125
(hourly rate)= 162.50 (overtime rate an hour), Take home pay: 1000 (rate for the
regular holiday) + 325 (2 hours overtime during the regular holiday) = 1325 (total
take home pay)